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Gold/Mining/Energy : Gold and Silver Juniors, Mid-tiers and Producers

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To: CathyJ who wrote (44246)	7/8/2007 1:36:11 PM
From: koan	Read Replies (1) of 78422

CAT: After all the activity this past week with BWR.wt I have a question on BWR (all values from Stockwatch)-- BWR.wt price is $2.37 BWR price is $3.34 Strike price is $1.01 for the warrants. I understand they are in the money, but if I buy the warrants at $2.37, the price needs to go to $3.38 (.04) difference for ME to be making money. Is the primary reason, at this juncture, to buy the warrants vs. the stock the potentially less volatility of the warrant and the time value of the warrant? Thanks for the help in figuring this out. Cat In short: The reason to buy the wts cat, is that one gets 1.4 to 1 leverage for free, as there is no appreciable time value to speak of in the wts. There should be! So one gets 1.4 leverage if the stock moves up and less to lose if the stock moves down. A total free lunch. I see no reason whatsoever to buy the stock instead of the wts given the fact no one is charging for the time value.

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